What is the Difference Between Managed Services and Outsourcing?

The terms "managed services" and "outsourcing" are sometimes used interchangeably and thought about as being roughly the same thing, which is why some erroneously believe the former to be little more than a dressed-up term for the latter. As both involve seeking assistance from outside organisations, the confusion is understandable.

However, beneath this surface-level similarity, the actual services you receive from outsourcing and managed services can be vastly different. In this article, we explain precisely how managed services and outsourcing differ, outline the benefits of both, and explain why a managed service provider can be ideal for small business IT support.

Understanding Outsourcing

In order to understand the differences between "outsourcing" and "managed services", it is first necessary to define the two terms and highlight some of the advantages that are typically associated with each.

Outsourcing can be defined as the delegation of planned or existing business activities to an outside organisation. The work that you delegate could theoretically be performed in-house but, as Investopedia points out, enlisting the help of a third-party can lower equipment, technology, rent and labour costs, and allow you to focus on core activities.

Crucially, outsourcing is associated with narrowly defined activities and processes, rather than broader strategies. You ask the third-party organisation to perform the business activities you need from them and they do those activities. You pay them for their services, but what you pay can be much less than the costs of doing those activities yourself.

In simple terms, you ask them to do the work, they do the work and they bill you for that work.

Understanding Managed Services

Managed services refer to the hiring of an external organisation for much more comprehensive support. With this approach, rather than delegating quite narrow and specific tasks or operations to the third-party, they will instead adopt a much more holistic approach, and payment occurs on a subscription-type basis.

With IT services providers, for example, you might outsource a specific IT task to another organisation, whereas a managed service provider will assist you more strategically, taking over the management of your IT infrastructure, offering advice on improvements you could make, and taking a vested interest in your long-term success.

"It's important to note that a core difference between outsourcing and managed services is the degree of foresight they exhibit," an article for Visionet explains. "A managed service provider genuinely wants to see your business succeed. They will propose solutions that are effective and long-lasting, not provisional measures that are merely expedient."

Put simply, a managed service provider will be a specialist in a certain area, such as small business IT support, and will then be able to use their expertise to manage that aspect of your business more effectively.

Why Use An MSP For IT Support?

It is important to understand that both outsourcing and managed services have their place. Ultimately, your own requirements and in-house skills will dictate which is the best option for you in relation to certain activities.

When it comes to IT services providers, the managed option is often the way to go. This is especially true if you run an SME, where you may not have the in-house skills or the resources to effectively manage your IT infrastructure, continuously monitor your network operations centre, plan for disaster scenarios and build cyber security awareness.

Cyber threats are becoming more varied and prevalent, making it essential to take cyber security seriously, while businesses rely on their IT systems more than ever, meaning any downtime at all can be extremely costly. This can make it vital for disaster recovery solutions to be in place, and for proactive monitoring to occur.

This need for proactive, strategic and holistic long-term support is where working with a managed service provider really pays off. An MSP can offer services to improve your efficiency and reduce the likelihood of problems ever occurring, but can also offer tried and tested solutions in the event that the worst does happen.

"There can no longer be a reactive break/fix contract," explains Mitesh Patel, the founder and MD of Fifosys. "They need to be proactive managed services contracts."

Managed IT Services From Fifosys

For businesses operating in London and the surrounding area, Fifosys offers a full range of managed IT services, including business IT support, NOC monitoring, cyber security solutions, IT infrastructure management and cloud computing. We can also help you to manage risk, ensure compliance with data legislation and protect against disaster.

At Fifosys, we adopt a hands-on, business-centric approach to IT support, tailoring our services to your needs. Unlike what you may acquire from outsourcing, we will work with you to develop a broader IT strategy, looking for ways to improve infrastructure, enhance security, and keep your business safe, secure and fully operational.